China Auto Manufacturers_ Oct-24 Imported Car Retail Sales -20% YoY _ -7% MoM

Summary of the Conference Call on China Auto Manufacturers Industry Overview - The report focuses on the China Auto Manufacturers industry, specifically the performance of imported vehicle sales in October 2024 and the year-to-date figures for 2024. Key Points 1. Imported Vehicle Sales Performance - October 2024 retail sales of imported vehicles decreased by 20% YoY and 7% MoM, totaling 48.5k units sold. - Year-to-date (10M24) imported car retail sales were down 14% YoY, amounting to 531.0k units sold. [1][2][7] 2. Brand-Specific Sales Data - Mercedes-Benz: Sold 10,724 units in October 2024, down 5% YoY and 10% MoM. Year-to-date sales decreased by 18% to 105,204 units. - BMW: Sales fell 36% YoY to 4,990 units in October, with a 18% decline in year-to-date sales. - Porsche: Experienced a 32% YoY drop, selling 3,618 units in October, and a 33% decline year-to-date. - Audi: Sales decreased by 29% YoY to 3,412 units in October, with a 15% decline year-to-date. - Land Rover: Notably down 89% YoY in October, selling 3,531 units. - Toyota: Sales decreased by 27% YoY to 2,333 units in October, but year-to-date sales increased by 8%. - Other Brands: Significant declines were noted across various brands, with total import passenger vehicle sales down 20% YoY in October. [2][7] 3. Investment Ratings - ZSG (0881.HK): Target price raised to HK$23.25** based on a **6x 2026E P/E** multiple, reflecting sector downcycle and earnings improvement trajectory. - **Yongda (3669.HK)**: Target price set at **HK$2.98, with a projected 8% dividend yield for 2024. - Meidong Auto (1268.HK): Target price of HK$2.40, with a focus on cash flow and healthy inventory management. [9][12][13] 4. Risks Identified - Macroeconomic Weakness: A weak macro environment could reduce consumer purchasing power, especially in lower-tier cities. - Revenue and Margin Risks: Lower-than-expected revenues and gross profit margins in the passenger vehicle and after-sales businesses could impact performance. - Intensified Competition: Increased competition may pressure profitability. - Sales and Earnings Risks: Risks associated with actual sales and earnings performance, particularly if a post-pandemic rebound does not occur as anticipated. [10][11][14] 5. Analyst Insights - Analysts express caution regarding the overall market conditions and the potential for continued declines in sales across various brands. The focus remains on identifying companies with strong management and prudent expansion strategies to navigate the current downcycle. [4][10][11] Additional Important Information - The report includes detailed sales figures by brand and highlights the significant declines in the luxury vehicle segment. - Analysts emphasize the importance of monitoring macroeconomic indicators and consumer sentiment as key factors influencing the auto industry in China. - The report also discusses the potential for dealer consolidation in the medium term, which could impact market dynamics. [1][2][9][10]